DEFINITION OF LAW
Right vs obligation
Sanchez Roman
A rule of conduct, just, obligatory, promulgated
by legitimate authority, and of common
observance and benefit.
GENERAL CLASSIFICATION OF LAW
1. Eternal law – God’s plan for all creation
2. Natural law – Part of eternal law that
applies to human beings. It can be
discerned by unaided human reason and
consists of correct moral principles.
3. Divine law – Part of eternal law that God
reveals to us human beings through the
Scripture. (part of a specific belief or
religion)
Aquinas insists that human laws are
genuine laws only if they do not
contradict natural or divine law.
For Austin, divine law are rules that God
commands all human beings to follow.
4. Positive law – Valid laws are simply rules
that come from certain people (kings, city
councils, etc), in accordance with certain
procedures that society enforces.
Hart: Essence of legal positivism is the
separation thesis:
Having a LEGAL RIGHT to do X does not
entail having a moral right to do it, and
vice versa.
Having a LEGAL OBLIGATION to do
something does not entail having a moral
right to do it, and vice versa.
Having a LEGAL JUSTIFICATION to do
something does not entail having a moral
justification, and vice versa.
Makati Stock Exchange vs Campos
Right – claim or title to an interest in anything
that is enforceable by law. Right is a power,
privilege, or immunity guaranteed under a
constitution, statute or decisional law, or
recognized as a result of long usage, constitutive
of a legally enforceable claim of one person
against the other.
1156 – An obligation is a juridical necessity to
give, to do or not to do.
Arias Ramos
Obligation – juridical relation whereby a person
(creditor) may demand from another (debtor) the
observance of a determinative conduct (giving,
doing or not doing), and in case of breach may
demand satisfaction from assets of the latter.
Came from the Latin word “obligare” which
means to bind
Elements of an obligation:
1. Active subject (creditor) – possessor of the
right
2. Passive subject (debtor) – has the duty to
give, to do or not to do
3. Object or prestation – subject matter of
the obligation
4. Efficient cause (vinculum or juridical tie) –
the reason why the obligation exists
Sometimes, FORM is also important.
Juridical necessity – means non-compliance can
result in juridical or legal sanction.
KINDS OF OBLIGATIONS
From viewpoint of sanction:
1. Civil obligation (perfect obligation) –
sanction is judicial process
2. Natural obligation – duty not to recover
what has voluntarily been paid although
 payment was no longer required. Sanction
is law
3. Moral obligation (imperfect obligation) –
Duty of a Catholic to hear mass on
Sundays; holy obligation. Sanction is
conscience or moral compass.
As to viewpoint of subject matter:
1. Real obligation – obligation to give
a. Specific (set apart from a class)
b. Generic or indeterminate (one or
part of a class)
2. Personal obligation – obligation to do or
not to do
As to affirmativeness of the obligation:
1. Positive or affirmative obligation – to give
and to do
2. Negative obligation – not to do
As to viewpoint of persons obliged
1. Unilateral – one of the parties is bound
(e.g. simple loan)
2. Reciprocal or bilateral – both parties are
bound (e.g. sale)
SOURCES OF OBLIGATIONS
1157. Obligations arise from:
(1) Law; (obligations ex lege)
e.g. duty to pay taxes and support the family
(2) Contracts; (obligations ex contractu)
e.g. duty to repay a loan by virtue of an
agreement
(3) Quasi-Contracts; (obligations ex quasi-
contractu)
e.g. duty to refund excess change because of the
quasi contract solutio indebiti or undue payment
(4) Acts and omissions punished by law; and
(obligations ex maleficio or ex delicto)
e.g. duty to return stolen carabao
(5) Quasi-delicts. (obligations ex quasi-delicto or
ex quasi-maleficio)
e.g. duty to repair damage due to negligence
Sources of obligation is exclusive.
- Navales vs Rias, 8 Phil 508
What is a contract?
Meeting of the minds between two persons
whereby one binds himself with respect to the
other, to give something or to render some
service. – Art 1305, NCC
Stages of a contract:
1. Negotiation – Period when prospective
contracting parties indicate interest in the
contract to the time contract is concluded.
2. Perfection – Contract takes place upon
concurrence of the essential elements. It
is when a contract is perfected that it
gives rise to an obligation.
3. Consummation – begins when the parties
perform their respective undertakings
under the contract culminating in the
extinguishment thereof.
What is a quasi-contract?
Certain lawful, voluntary and unilateral acts give
rise to the juridical relation of quasi contract to
the end that no one shall be unjustly enriched or
benefitted at the expense of another. – Art. 2142,
NCC
Conditions of unjust enrichment:
1. A person is unjustly benefitted; and
2. Such benefit is derived at the expense of
or to the damage of another.
Kinds of quasi-contracts:
1. Solutio indebiti – If something is received
when there is no right to demand it, and it
was unduly delivered through mistake,
the obligation to return it arises. – Art
2154, NCC
Requisites:
a. Absence of a right to collect excess
sum
b. Payment was made by mistake
 2. Negotiorium gestio (unauthorized
management) – Whoever voluntarily
takes charge of the agency or
management of the business or property
of another, without any power from the
latter, is obliged to continue the same
until the termination of the affair and its
incidents, or to require the person
concerned to substitute them. – Art 2144,
NCC
No negotiorium gestio when:
a. Property or business is not neglected
or abandoned; and
b. If in fact, the manager has been tacitly
authorized by the owner.
What is delict?
Violation of penal laws that give rise to claim for
compensation.
Every person criminally liable for a felony is also
civilly liable. – Art 100, RPC
What is a quasi-delict?
Whoever by act or omission causes damage to
another, there being fault or negligence is obliged
to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-
delict. – Art. 2176, NCC
Simply, tort or culpa aquiliana
Negligence is the omission of that diligence which
is required by the circumstances of a person,
place and time. – Art. 1173, NCC. Thus, it is a
question of fact.
Put another way, “Negligence is the failure to
observe, for the protection of the interests of
another person, that degree of care, precaution,
and vigilance which the circumstances justly
demand, whereby such other person suffers
injury.” (US vs Barrias, 23 Phil 434)
Elements of quasi-delict or negligence:
1. Fault or negligence of the defendant;
2. Damage suffered or incurred by the
plaintiff; and
3. Relation of cause and effect between the
fault or negligence of the defendant and
the damage incurred by the plaintiff.
Kinds of negligence or culpa:
1. Culpa aquiliana or quasi-delict –
negligence resulting from failure to
observe require diligence which causes
damage to another person
Culpa aquiliana (quasi-delicts) can refer to
acts which are criminal in character,
whether the same be voluntary or
negligent. (Elcano vs Hill, 77 SCRA 98)
2. Culpa contractual – negligence in the
performance of a pre-existing contract
*Both culpa aquiliana and culpa contractual are
civil negligence.
3. Culpa criminal – negligence resulting in
the commission of a crime (criminal
negligence)
Examples
1. While driving a car recklessly, I injured a
pedestrian.
2. While cleaning my window sill, my
negligence caused a flower pot to fall on
the street, breaking the arms of my
neighbor.
Basic rules on quasi-delict
1. When the plaintiff’s own negligence was
the immediate and proximate cause of his
injury, he cannot recover damages. But if
his negligence was only contributory, the
immediate and proximate cause of the
injury being the defendant’s lack of due
care, the plaintiff may recover damages,
but the courts shall mitigate the damages
to be awarded.
Proximate cause – That reason or cause, which in
the natural and continuous sequence, unbroken
by any efficient intervening cause, produces the
injury, and without which the result would not
have occurred.
 2. Whoever by act or omission, causes
damage to another, there being no fault
or negligence, is obliged to pay for the
damage done. – Art. 2176, NCC
3. Father, or in his absence, the mother, or
in her absence, the guardian, is
responsible for damages caused by minor
children who live in their company.
If the minor or insane person has no
parents or guardian, the minor or insane
person shall be answerable with this own
property.
4. Owners and managers of an
establishment or enterprise are likewise
responsible for damages caused by their
employees in the service of the branches
in which the latter are employed or on the
occasion of their functions.
Domingo de la Cruz vs Northern Theatrical
Enterprises, Inc. (GR No. L-7089, Aug 31, 1954)
Facts: Dela Cruz was hired by Northern Theatrical
as a special guard to man the main entrance of
the theater, to maintain peace and order and
report commission of disorders within the
premises. A certain Martin tried to crash inside
the establishment and attacked de la Cruz with a
bolo. De la Cruz defended himself and when he
had no choice, shot Martin resulting to his death.
De la Cruz was charged with homicide, where he
was acquitted. De la Cruz sought reimbursement
for costs of legal services in the criminal cases
filed against him from Northern Theatrical
Enterprises. The company denied his claim that
he was acting as an agent thereof and is entitled
to reimbursement.
Issue: W/N an employee can reimburse from the
employer legal expenses arising from damages
caused by the employee while on duty.
Held: No, an employee cannot reimburse from
the employer.
Damage suffered by Dela Cruz by reason of the
expenses incurred by him in remunerating his
lawyer is not caused by his act of shooting to
death the gate crasher but by the filing of the
charge of homicide which made it necessary for
him to defend himself in court. Had no criminal
charge been filed, there would have been no
expenses incurred. The damage suffered by the
plaintiff was caused by the improper filing of the
criminal charge. The shooting to death was not
the proximate cause of the damages suffered but
may be regarded only as a remote cause, because
from the shooting to the damages suffered, there
was not that natural and continuous sequence
required to fix civil responsibility.
5. Employers are liable for damages caused
by their employees and household helpers
acting within the scope of their assigned
tasks, even though the former are not
engaged in any business or industry.
6. Teachers or heads of establishments of
arts and trades shall be liable for damages
caused by their pupils and students or
apprentices, so long as they remain in
their custody.
Defense: Observance of diligence of a
good father of a family (bonum pater
familias) to prevent the damage.
7. Possessor of an animal or whoever may
make use of the same is responsible for
the damage which it may cause, although
it may escape or be lost.
Defense: Force majeure or from the fault
of the person who suffered damage.
8. In motor vehicle mishaps, owner of
vehicle is solidarily liable with his driver, if
the former, who was in the vehicle, could
have, by the use of due diligence,
prevented the misfortune. It is disputably
presumed that a driver was negligent, if
he had been found guilty of reckless
driving or violating traffic regulations at
least twice within the next preceding two
months, or if at the time of the mishap, he
was violating any traffic regulation.
 Defense: Diligence of a good father of a
family.
9. Manufacturers and processors of food,
drinks, toilet articles and similar goods
shall be liable for death or injuries caused
by any noxious or harmful substances
used, although no contractual relation
exists between them and the consumers.
– Art. 2187, NCC
d. By emanations from tubes, canals,
sewers or deposits or infectious
matter, constructed without
precautions suitable to the place.
*If damage referred to should be the result of any
defect in the construction mentioned in Article
1723, third person suffering damages may
proceed only against the engineer, architect or
contractor.

Presumption of negligence on the part of the 13. Head of a family that lives in a building or
defendant if the death or injury results from his a part thereof is responsible for damages
possession of dangerous weapons or substances, caused by things thrown or falling down
except when possession or use thereof is from the same.
indispensable in his occupation or business. – Art.
Delict Quasi-Delict
2188, NCC
Wrong committed Wrong committed
10. Provinces, cities and municipalities shall against the state against a person
be liable for the death of, or injuries Criminal intent, Criminal intent, not
suffered by any person by reason of the necessary necessary
defective condition of roads, streets, Applies only when Actionable in any act
bridges, public buildings, and other public there is a law or omission where
works under their control or supervision. penalizing the action fault or negligence
– Art. 2189, NCC intervenes
Requires proof Requires
11. Proprietor of a building or structure is beyond reasonable preponderance of
responsible for the damages resulting doubt evidence
from its total or partial collapse, if it Employer’s liability is Employer’s liability is
should be due to lack of necessary repairs. subsidiary primary
– Art. 2190, NCC
1158 – Obligations derived from law are not
12. Proprietors shall also be responsible for presumed. Only those expressly determined in
damages caused: this Code or in special laws are demandable, and
shall be regulated by the precepts of the law
a. By the explosion of machinery which which establishes them; and as to what has not
has not been taken care of with due been foreseen, by the provisions of this Book.
diligence, and the inflammation of
explosive substances which have not 1159 – Obligations arising from contracts have
been kept in a safe and adequate the force of law between the contracting parties
place; and should be complied with in good faith.

b. By excessive smoke, which may be
harmful to persons or property;
c. By the falling trees situated at or near
highways or lanes if not caused by
force majeure;
Contracting parties may freely stipulate their
duties and obligations in their contract which
would be binding on them, as long as the terms
are not contrary to law, morals, good customs,
public order, or public policy. The agreement
between the parties must be respected and given
the force of law between them.
Neither party may unilaterally and upon his own
exclusive volition, escape his obligations under
the contract, unless the other party assented
thereto, or unless for causes sufficient in law and
pronounced adequate by a competent tribunal.
There must be “compliance in good faith.”
Difference between an obligation and contract
Obligation Contract
Result of a contract or If valid, always results
some other source in an obligation
Not all obligations
come from contract
Not necessarily true Always presupposes
for all obligations meeting of the minds
Ex 1. A borrower agreed to pay his debt, and in
case of non-payment, to render free service as
servant.
Issue: Is the obligation valid?
Held: The obligation to pay is valid. But the
undertaking to render free domestic services is
contrary to law and morals. (Involuntary
servitude) – De los Reyes vs Alejado, 16 Phil 499
Ex 2. The parties in a case agreed to go to court in
Albay, although another court has jurisdiction. Is
this valid?
Held: No. Agreement is null and void. Jurisdiction
is conferred by law, and not by will of the parties.
1160 – Obligations derived from quasi contracts
shall be subject to the provisions of Chapter 1,
Title XVII, of this Book.
Is a quasi-contract an implied contract?
No, because unlike in an implied contract, there is
NO meeting of the minds in a quasi-contract.
Other examples of quasi-contracts:
1. Support from a stranger
2. Funeral expenses from a third person
3. Support to an orphan, insane person or
indigent person
4. Accident
5. Fire, flood, storm or other calamity
6. Government to be reimbursed by person
liable for expenses on compliance with
health or safety regulations concerning a
property
7. Finder of lost personal property
8. Possessor in good faith’s right to be
reimbursed for necessary and useful
expenses
9. Third person, without knowledge of the
debtor, pays the debt, the right to be
reimbursed only insofar as beneficial to
the debtor
10. Payment of another person’s tax –
reimbursement.
1161 – Civil obligations arising from criminal
offenses shall be governed by penal laws,
subject to the provisions of Article 2177, and of
pertinent provisions of Chapter 2, Preliminary
Title, on Human Relations, and of Title XVIII of
this Book, regulating damages.
Every person criminally liable is also civilly liable.
What is included in civil liability?
1. Restitution (return or restoration);
2. Reparation of the damage caused (pay the
value of the thing, including sentimental
value);
3. Indemnification for consequential
damages (to the injured party and his
family)
LG Foods Corp & Gabor vs Pagapong-Agraviador
and Sps. Vallejera, GR No. 158995, Sept 26, 2006
Facts: Y was hit by a van owned by Z Corp and
driven by its employee X. Y died as a result of the
accident.
During the case of reckless imprudence resulting
to homicide, X committed suicide and the court
dismissed the criminal case.
H & W, parents of Y filed a complaint for damages
against Z Corp saying that the company failed to
exercise due diligence in the selection and
supervision of employees.
Z Corp moved to dismiss the complaint saying
that conviction of X is a condition sine qua non to
hold the company liable. Since the driver died
before conviction, Z Corp cannot be held liable
subsidiarily.
Issue: Is Z Corp correct?
Held: No, Z Corp is not correct.
Victims of negligence or their heirs have a choice
between an action to enforce the civil liability
arising from (1) delict under Art 100 of the RPC
and (2) independent civil actions (such as culpa
contractual, culpa aquiliana or torts) under Art
2176 to 2194 of the NCC.
Effect of acquittal in criminal case
NO CIVIL LIABILITY – if reason for acquittal was
because accused could not have committed the
act
HAS CIVIL LIABILITY – if acquittal is due to
exempting circumstance (e.g. insanity)
- If there is an independent civil action and
liability is proved by mere preponderance of
evidence (vs. beyond reasonable doubt)
Preponderance of evidence - evidence which is
of greater weight, or more convincing than that
which is offered in opposition to it (Republic vs
Borja)
Proof beyond reasonable doubt – does not
mean such a degree of proof as, excluding
possibility of error, produces absolute certainty.
Only moral certainty is required, or that degree
of proof which produces conviction in an
unprejudiced mind. (People vs Claro, April 5,
2017)
- That degree of proof, which, excluding the
possibility of error, produces moral certainty
that the accused actually committed the
criminal offense.
Example of independent civil action
Art. 33 (NCC) – In cases of defamation, fraud,
and physical injuries, a civil action for damages
entirely separate and distinct from the criminal
action, may be brought by the injured party.
Such civil action shall proceed independently of
the criminal prosecution, shall require only a
preponderance of evidence.
*Reservation of the right to file a separate civil
action must be made to prove civil liability
independent of the criminal liability. Otherwise,
civil liability will be deemed included in the
criminal liability, which must be proved with a
higher quantum of evidence.
*Civil case based on independent civil action can
proceed despite filing of a criminal proceeding.
Article 1162 – Obligations derived from quasi-
delicts shall be governed by provisions of
Chapter 2, Title XVII of this Book and by special
laws. (Quasi-Delicts under Extra Contractual
Obligations)
Additional notes:
1. There must not be pre-existing contractual
relation between parties
2. Liability under quasi-delict is solidary.
3. Prescription of an action ex quasi-delicto is
not a bar to an action ex-delicto.
- QUIZ -
NATURE & EFFECTS OF OBLIGATIONS
Art. 1163 – Every person obliged to give
something is also obliged to take care of it with
the proper diligence of a good father of a family,
unless the law or the stipulation of the parties
requires another standard of care.
This article deals with the first effect of an
obligation to deliver a DETERMINATE THING (vs
generic thing), i.e., duty to exercise diligence.
Unless diligence is exercised, there is a danger
that the property would be lost or destroyed,
thus, rendering illusory the obligation.
Generally, required diligence is that of a good
father of a family, unless the (1) law or a (2)
contract provides for a different standard of care.
E.g., (1) Extraordinary diligence - common
carriers (Art. 1755, NCC); (2) high standards of
integrity & performance - banks (Sec 2, GBL)
Diligence – care; caution, attention and care
required from a person in a given situation.
Due diligence – Diligence reasonably expected
from, and ordinarily exercised by a person who
seeks to satisfy a legal requirement or to
discharge an obligation.
Extraordinary diligence – Extreme care that a
person of unusual prudence exercises to secure
rights or property.
Art. 1164 – The creditor has a right to the fruits
of the thing from the time the obligation to
deliver it arises. However, he shall acquire no
real right over it until the same has been
delivered to him.
When is creditor entitled to fruits?
A is obliged to give B on Dec 3, 2004, a particular
parcel of land. Before Dec 3, B has no right
whatsoever over the fruits. After Dec 3, 2004, B,
the creditor is entitled as a matter of right to the
fruits. But if the fruits and the land are actually or
constructively delivered only on Dec 15, 2004, B
becomes owner of said fruits and land only from
said date. Between Dec 3 and Dec 15, B had only
a personal right (enforceable against A). After Dec
15, B has a real right over the properties, which is
a right that is enforceable against the whole
world.
Personal right – jus in personam or jus ad rem;
power to demand by one person from another
the fulfillment of a prestation to give, to do or not
to do.
Real right – jus in re or jus in rem; power over a
specific thing without a passive subject individually
determined and may be personally exercised, and is
binding on the whole world. (e.g., right of ownership
or possession)
E.g. Purchase of land. Before land is delivered, proper
remedy is specific performance and delivery (personal
rights), not accion reinvindicatoria (real right since it
presupposes ownership)
What is delivery?
Formal act of transferring something, such as a deed
or yielding possession of a thing to another.
Kinds of delivery:
1. Actual delivery - property physically changes
hands; actual transfer
2. Constructive delivery – physical transfer is
implied; transfer by operation of law
a. Traditio simbolica – keys to a bodega are
given
b. Traditio longa manu – pointing out of an
object
c. Traditio brevi manu – possessor of a thing
not the owner eventually becomes the
owner (e.g. tenant buys house he is
renting)
d. Traditio constitutum possessorium –
opposite of brevi manu; possessor of a
thing as owner retains possession no
longer as owner, but in some other
capacity
e. Tradition by execution of legal forms and
solemnities (e.g., execution of public
instrument selling land)
When does obligation to deliver arise?
1. It depends. If there is no term or condition,
from perfection of contract.
2. If there is a term or condition, from the
moment the term arrives or the condition
happens.
Kinds of fruits
1. Natural fruits – Spontaneous products of the
soil and the young and other products of
animals. E.g. grass and plants produced by
lands w/o cultivation or labor; eggs and chicks
of chicken
 2. Industrial fruits – are those produced by lands
of any kind through cultivation or labor; rice
and vegetables produced by lands through
cultivation or labor
3. Civil fruits – rents of buildings, price of leases
of lands and other property and amount of
perpetual or life annuities or other similar
income.
Art. 1165 – When what is to be delivered is a
determinate thing, the creditor, in addition to the
right granted him by Article 1170, may compel the
debtor to make the delivery.
If the thing is indeterminate or generic, he
may ask that the obligation be complied with at the
expense of the debtor.
If the obligor delays, or has promised to
deliver the same thing to two or more persons who
do not have the same interest, he shall be
responsible for fortuitous event until he has effected
the delivery.
Specific or determinate things – if it is capable of
particular designation
E.g. this car; the car owned by A on Sept 12, 2005; the
car with plate no. 1814 (2005); this particular picture
of Sofia Vergara in my notebook
Generic or indeterminate things – if it refers only to a
class, to a genus, and cannot be pointed out with
particularity
E.g. a car; a 2005 BMW automobile; the sum of P5
million; a kilo of sugar
Remedies of creditor when debtor fails to comply
with this obligation (Art 1191, NCC)
1. Demand specific performance
2. Demand rescission or cancellation
3. Demand damages either with or without (1)
and (2)
E.g. If I am entitled to 10 kilos of Sugar from A, I can
demand that A obtain the sugar and give me 10 kilos.
A cannot insist on just paying me damages or the
monetary value of the sugar. Upon the other hand, if I
desire to, I can just buy 10 kilos of sugar anywhere
and charge the expense to A.
*Second paragraph should be read in together with
Art. 1246, NCC: “When the obligation consists in the
delivery of an indeterminate or generic thing, whose
quality and circumstances have not been stated, the
creditor cannot demand a thing of superior quality.
Neither can the debtor deliver a thing of inferior
quality. The purpose of the obligation and other
circumstances shall be taken into consideration.”
Effect of fortuitous events
1. In a specific obligation, general rule is loss of
specific thing extinguishes the obligation.
2. In a generic obligation, loss of a generic thing
does not extinguish the obligation
EXCEPTIONS:
1. Obligor is in delay or “mora”
2. Obligor is in bad faith (promising the same
thing to two persons)
Fortuitous event (caso fortuito) – Events which could
not have been foreseen, or which though foreseen,
were inevitable. (Art 1174, NCC)
Ordinary delay – non-performance at the stipulated
time;
Legal delay or default – default that amounts to a
virtual non-fulfillment of the obligation. As a rule, to
put debtor in default, there must be a demand for
fulfillment, either judicial or extrajudicial.
Art. 1166 – The obligation to give a determinate
thing includes that of delivering all its accessions and
accessories, even though they may not have been
mentioned.
Accessories – those joined to or included with the
principal for the latter’s better use, perfection or
enjoyment (e.g., keys to a house, dishes in a
restaurant)
Accessions – additions to or improvements upon a
thing. These include alluvium (soil gradually deposited
by the current of a river on a river bank) and whatever
is built, planted, or sown on a person’s parcel of land.
Principle: Accessory follows the principal.
Exception to 1166: When there is stipulation to
exempting accessories and accessions.
1167 – If a person obliged to do something fails to do
it, the same shall be executed at his cost.
This same rule shall be observed if he does it in
contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been
poorly done be undone.
What type of obligation is referred to by the first
paragraph? – POSITIVE PERSONAL OBLIGATION
Remedies of creditor if debtor fails to do so
1. To have the obligation performed (by himself
or by another) at debtor’s expense, only if
another can do the performance (Chaves vs
Gonzales, Apr 30, 1970)
2. Obtain damages (Art 1170, NCC)
Damages alone cannot substitute for
performance if:
a. owners can do it
b. purely personal or special (e.g., Amorsolo
painting)
In such case, only damages may be asked,
unless substitution is permitted.
Q: Is specific performance a remedy in
personal obligations? NO. INVOLUNTARY
SERVITUDE.
Chaves vs Gonzales, L-27454, Apr 30, 1970
FACTS: Typewriter owner asked a repairman to fix his
typewriter. Despite repeated demands, no work was
done thereon. Repairman returned the typewriter still
unfixed and part already missing. Owner claims
damages. Repairman says owner should have first
filed with the court a petition to fix period within w/c
the job of repairing was to be finished.
ISSUE: Can the repairman be liable for damages?
HELD: Yes, the repairman must pay damages. Art
1167: if a person obliged to do something fails to do
it, the same shall be executed at his cost.”
Failure of the owner of the computer notebook to first
ask the court for the fixing of the period to make the
repairs is of no significance. There is non-performance
already; thus, a breach of contract.
When a thing may be ordered undone
1. If poorly made
2. Obligation is a negative one (provided
undoing is possible) – Art 1168, NCC
Art 1168 – When the obligation consists in not doing,
and the obligor does what has been forbidden him, it
shall also be undone at his expense.
Art 1169 – Those obliged to deliver or to do
something incur in delay from the time the obligee
judicially or extrajudicially demands from them the
fulfillment of their obligation.
However, the demand by the creditor shall not be
necessary in order that delay may exist:
1. When the obligation or the law expressly so
declares; or
2. When from the nature and the circumstances
of the obligation it appears that the
designation of the time when the thing is to
be delivered or the service is to be rendered
was a controlling motive for the
establishment of the contract; or
3. When demand would be useless, as when the
obligor has rendered it beyond his power to
perform.
In reciprocal obligations, neither party incurs
in delay if the other does not comply or is not
ready to comply in a proper manner with
what is incumbent upon him. From the
moment one of the parties fulfills his
obligation, delay by the other begins.
GEN RULE: To put debtor in default, demand is
needed.
Judicial: if through specific performance; extrajudicial
if w/o court proceeding.
Exceptions (No need for demand):
1. When the law provides (taxes are due w/o
need for demand)
2. Obligation expressly provides no need for
demand to have default. Fixing of period is
not enough.
3. Time is of the essence / controlling motive
4. Demand would be useless as when the obligor
has rendered it beyond his power to perform.
5. Obligor expressly acknowledged that he is in
default.
Different kinds of mora (or default):
1. Mora solvendi (default on the part of the
debtor)
a. Mora solvendi ex re (debtor’s default
in real obligations)
b. Mora solvendi ex persona (debtor’s
default in personal obligations)
2. Mora accipiendi (default on the part of the
creditor)
 3. Compensatio morae (when in a reciprocal 3. War between neutral country and country at
obligation both parties are in default); here it war with as long as substantial compliance is
is as if there is no default; mutual delay still possible
cancels out effects of default
1171 – Responsibility arising from fraud is
WHEN DAMAGES MAY BE LOST demandable in all obligations. Any waiver of future
A creditor entitled to damages because of mora may fraud is void.
lose the same when:
1. Principal obligation prescribes / allowed to * Past fraud may be waived. Future fraud, no.
lapse
2. Damages or interests are allowed to prescribe KINDS OF FRAUD
3. Damages or interests are condoned 1. Dolo causante / Causal fraud – deception used
by one party prior to or simultaneous with the
1170 – Those who, in the performance of their contract in order to secure consent of the
obligation are guilty of fraud, negligence, or delay other. (SERIOUS DECEIT)
and those who, in any manner contravene the tenor 2. Dolo incidente / Incidental fraud – Without
thereof, are liable for damages. which, the other party would still have
entered the contract anyway.
TYPES OF DAMAGES (M-E-N-T-A-L)
1. Moral – physical suffering, mental anguish, 1172 – Responsibility arising from negligence in the
serious anxiety, besmirched reputation, performance of every kind of obligation is also
wounded feelings, moral shock and social demandable, but such liability may be regulated by
humiliation the courts, according to the circumstances.
2. Exemplary – imposed by way of example
3. Nominal – to indemnify loss; vindication of Dolo (Fraud) Culpa (Negligence)
right There is deliberate Although voluntary (but
4. Temperate / Moderate – more than nominal intention to cause not done through force),
but less than actual damage (amount cannot damage still there is no
be determined) deliberate intention to
5. Actual / Compensatory – adequate cause damage
compensation for pecuniary loss
6. Liquidated – agreed by the parties in a Liability from dolo Liability due to
contract breached cannot be mitigated by negligence may be
the courts reduced in certain cases
GROUNDS FOR LIABILITY IN THE
PERFORMANCE OF AN OBLIGATION Waiver of an action to Waiver of an action for
1. Fraud (deceit or dolo) – intentional evasion of enforce liability due to liability due to future
fulfillment (Art. 1171) future fraud is VOID negligence may, in a
2. Negligence (fault or culpa) – omission of certain way, be allowed.
diligence required by the nature of obligations
and corresponds with the circumstances of
the persons, time and place. If bad faith, it is TYPES OF CULPA
fraud, not negligence) 1. Culpa contractual – Negligence is merely
3. Default (mora) – on the part of the obligor incidental, incident to the performance of an
4. Violation of the terms of an obligation – obligation already existing because of a
contravention of the tenor of an obligation contract
2. Culpa aquiliana – Negligence is direct,
EXCEPTION: Fortuitous event substantive and independent.
3. Culpa criminal – Negligence is direct,
EXCEPTION TO THE EXCEPTION: Default substantive and independent of a contract.

Does not excuse fulfillment:

1. Increase in cost of performance (US vs
Veradero de la Quintana)
2. Poverty (Repide vs Alzelius)
1173 – The fault or negligence of the obligor consists
in the omission of that diligence which is required by
the nature of the obligation and corresponds with
the circumstances of the person, of the time and of
the place. When negligence shows bad faith, the
provisions of Article 1171 and 2201, paragraph 2,
shall apply.
If the law or contract does not state the diligence
which is to be observed in the performance, that
which is expected of a good father of a family shall
be required.
Degrees of culpa under Roman Law
1. Culpa lata – grave negligence; requires just
slight diligence;
2. Culpa levis – ordinary diligence; requires
ordinary diligence;
3. Culpa levissima – slight negligence; requires
great diligence.
KINDS OF DILIGENCE UNDER THE CIVIL CODE
1. That agreed upon by the parties
2. In the absence of (1), that required by law.
3. In the absence of (1) and (2), that expected of
a good father of a family
1174 – Except in cases expressly specified by the law,
or when it is otherwise declared by stipulation or
when the nature of the obligation requires the
assumption of risk, no personal shall be responsible
for those events which could not be foreseen, or
which, though foreseen, were inevitable.
General rule: No liability for a fortuitous event
Exceptions:
1. When expressly declared by law
2. When expressly declared by stipulation or
contract
3. When the nature of the obligation requires
the assumption of risk
ESSENTIAL CHARACTERISTICS OF FORTUITOUS EVENT
1. Cause must be independent of the will of the
debtor (freedom from participation or
aggravation)
2. Impossibility of foreseeing or impossibility of
avoiding it, even if foreseen
3. Occurrence must be such as to render it
impossible for the debtor to fulfill his
obligation in a normal manner.
1175 – Usurious transactions shall be governed by
special laws.
Usury – contracting for or receiving something in
excess of the amount allowed by law for the loan or
use of money, goods, chattels or credits. It is the
exaction of excessive interests.
KINDS OF INTEREST
1. Interest for compensation or use of the
money (moratory interest)
2. Interest given by way of damages
(compensatory interest)
SIMPLE LOAN or MUTUUM
By the contract of simple loan, one of the parties
delivers to another money or other consumable things
upon the condition that the same amount of the same
kind and quality shall be paid. (Art. 1933, NCC)
Legal rate: 6% per annum (BSP Monetary Board
Resolution 796, May 16, 2013)
1176 – The receipt of the principal by the creditor,
without reservation with respect to the interest, shall
give rise to the presumption that said interest has
been paid.
The receipt of a later installment of a debt without
reservation as to prior installment, shall likewise
raise the presumption that such installments have
been paid.
1177 – The creditors, after having pursued the
property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the
actions of the latter for the same purpose, save those
which are inherent in his person; they may also
impugn the acts which the debtor may have done to
defraud them.
RIGHTS OF CREDITORS
1. Exact payment
2. Exhaust debtors properties, generally by
attachment, except properties exempt by law
3. Accion subrogatoria (subrogatory action) –
Exercise all rights and actions except those
inherent in the person like parental authority,
right to revoke donations on ground of
ingratitude, hold office, carry out an agency.
This is not remedy of subrogation referred to
in novation.
4. Accion pauliana – Impugn or rescind acts or
contracts done by the debtor to defraud the
creditors.
EXAMPLE OF INHERENT RIGHTS OF DEBTOR THAT
CANNOT BE TRANSFERRED BY CREDITOR
1. Support
2. Public office
3. Honorary degrees
4. Personal rights of husband and wife
5. Right to revoke a donation
6. Right to appear in court proceedings
PROPERTY EXEMPT FROM EXECUTION
(Except as otherwise expressly provided by law)
1. Family home, except:
a. (Judicial & extrajudicial) Non-payment
of taxes
b. (Judicial & extrajudicial) Satisfaction
of judgment on a debt secured by
mortgage constituted on the family
home, before or after constitution of
FH;
c. (Extrajudicial) debts incurred before
declaration was recorded in the
Registry of Property;
d. (Extrajudicial) debts due to laborers,
mechanics, architects, builders,
materialmen and others who have
rendered service or furnished
material for the construction of the
building.
2. Ordinary tools and implements personally
used by him in his trade, employment or
livelihood;
3. Three horses, three cows, or three carabaos,
or other beasts of burden, such as the
judgment obligor may select necessarily used
by him in his ordinary occupation;
4. Necessary clothing and articles for ordinary
personal use, excluding jewelry;
5. Household furniture and utensils necessary
for housekeeping, and used for that purpose
by the judgment obligor and his family, such
as the judgment of obligor may select, of a
value not exceeding P100k;
6. Provisions for individual or family use
sufficient for four months;
7. Professional libraries and equipment of
judges, lawyers, physicians, pharmacists,
dentists, engineers, surveyors, clergymen,
teachers and other professionals, not
exceeding P300k in value;
8. One fishing boat and accessories not
exceeding the total value of P100k owne by a
fisherman and by the lawful use of which, he
earns his livelihood;
9. So much of the salaries, wages, or earnings of
the judgment obligor for his personal services
within the four months preceding the levy as
are necessary for the support of his family;
10. Lettered gravestones;
11. Monies, benefits, privileges, or annuities
accruing or in any manner obtained as such
support, any pension or gratuity from the
government;
12. Properties especially exempt by law
EXCEPTION TO THE EXCEPTION – Article or property
recovered for its price or upon a judgment of
foreclosure of a mortgage
1178 – Subject to the laws, all rights acquired in
virue of an obligation are transmissible, if there has
been no stipulation to the contrary.
General Rule: Rights are transmissible.
Exceptions:
1. If the law provides otherwise;
2. If the contract provides otherwise;
3. If the obligation is purely personal.
Non-negotiable promissory note
Even if a promissory note is not negotiable, it may still
be given, donated, or assigned to another. The effects
will be governed not by the law on negotiation but by
the law on assignment or donations. (Gonzales vs
Blas, 3 Phil 379) Payment can be made to transferee
provided he is in lawful possession of the credit.
(Azarraga vs Rodriguez, 9 Phil 637)
Negotiable Instruments Law (Act No. 2031, Feb 3,
1911)
DIFFERENT KINDS OF OBLIGATIONS
PRIMARY CLASSIFICATION OF OBLIG
1. Pure vs conditional
2. Pure vs with a term or period
3. Alternative or facultative vs conjunctive
4. Joint vs solidary
5. Divisible vs indivisible
6. With a penal clause vs without a penal clause
SECONDARY CLASSIFICATION OF OBLIG
1. Unilateral vs bilateral
2. Real vs personal
3. Determinate vs generic
4. Positive vs negative
5. Legal vs conventional vs penal
OTHER CLASSIFICATION OF OBLIG (Sanchez Roman)
1. As to juridical quality and efficaciousness:
Natural vs civil vs mixed
2. As to object: Possible vs impossible
3. Principal vs accessory
4. Simple vs compound (compound may be:)
 a. Conjunctive – demandable at the
same time
b. Distributive – either alternative or
facultative
5. As to defects:
a. No defect (valid)
b. Defective
i. Rescissible
ii. Voidable
iii. Unenforceable
iv. Void
1179 – Every obligation whose performance does not
depend upon a future or uncertain event, or upon a
past event unknown to the parties is demandable at
once.
Every obligation which contains a resolutory
condition shall also be demandable, without
prejudice to the effects of the happening of the
event.
PURE OBLIGATION – one without a condition or a
term; hence demandable at once, provided there
would be no absurdity
Examples:
1. I promise to pay you P1 million. This is
demandable at once, unless a period was
really intended as when a loan has just been
contracted. In such case, it would be absurd
to lend money only to immediately demand
payment at once.
2. When original period or condition has been
cancelled by mutual stipulation of both
parties.
CONDITIONAL OBLIGATION – when there is a
condition for the fulfillment
Example:
1. I’ll buy your land for P10 million if you pass
the CPA board exam this year.
2. I’ll buy your land for P10 million if you passed
the Bar exam last year (suspensive condition
since you have to wait for the exam result)
3. I’ll give you my land now, but should you fail
in the last bar exam, your ownership will
cease and it will be mine again (Resolutory
condition because it ends upon failure)
CONDITION – Uncertain event which wields an
influence on a legal relationship (Manresa)
TERM / PERIOD – That which necessarily must come
(like year 2030 or death) whether the parties know
when it will happen or not
Exercise:
Death due to SARS. Is this a period or condition?
ANS: condition, because death may be due to other
causes
An obligation is demandable at once when:
1. It is a pure obligation or
2. When it has a resolutory condition
Example: I’ll give you my car but you should
not marry Ms. X this year. – Demandable
NOW
I’ll give you my car but only after you can
prove that by the end of this year, you have
not married Ms. X. – Suspensive; not yet
demandable
*Past event unknown to the parties is not exactly a
CONDITION since as a matter of reality, the thing has
happened already or not. What is really meant here is,
FUTURE KNOWLEDGE OF A PAST EVENT will
determine whether an obligation will arise. Hence, a
condition is really a FUTURE AND CERTAIN event, not
a future OR certain event. (JBL Reyes, Observation on
the New Civil Code, Lawyer’s Journal, Jan 31, 1951, p.
47)
CLASSIFICATION OF CONDITIONS
1. Suspensive – happening of the condition gives
rise to the obligation
2. Resolutory – happening of the condition
extinguishes the obligation
3. Potestative – depends upon the will of the
debtor (e.g. I’ll sell you my car if I like)
4. Casual – depends on chance or hazard or the
will of a third person (e.g. if I win in the lotto)
5. Mixed – depends partly on the will of one of
the parties and partly on chance or the will of
a third person (e.g. if I pass the Bar)
6. Divisible – capable of partial performance
7. Indivisible – not capable of partial
performance because of the nature of the
thing, or because of the intention of the
parties
8. Positive – an act is to be performed
9. Negative – something will be omitted or not
done
10. Express – condition is stated
11. Implied – condition is merely inferred

12. Possible – capable of fulfillment in nature an
in law; doable
13. Impossible – not capable of fulfifllment due to
the nature or due to the operation of the law
or morals or public policy or due to a
contradiction in its terms
14. Conjunctive – all the conditions must be
performed
15. Alternative – only a few conditions have to be
performed
1181 – In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those
already acquired shall depend upon the happening
of the event which constitutes the condition.
SUSPENSIVE condition – the happening of which will
give rise to the acquisition of a right
- Also called conditions precedent or conditions
antecedent
- What characterizes an obligation with a
suspensive condition is the fact that its efficacy or
obligatory force is subordinated to the happening
of a future and uncertain event.
- If the suspensive condition does not take place,
the parties would stand as if the conditional
obligation never existed.
E.g. In his will, A gave some property to B, provided
that A would die within one year. A did not die within
one year. Since the suspensive condition was not
complied with, B is not entitled to inherit.
E.g. Before the writ of preliminary injunction can be
granted, the posting of a bond (to answer for
consequent damages) is a condition sine qua non
(indispensable condition) – San Miguel vs Elbinias, L-
48210, Jan 31, 1984.
Assign: Integrated Construction vs Relova, GR No.
41117, Dec 29, 1986.
RESOLUTORY condition – rights already acquired are
lost once condition is fulfilled (aka conditions
subsequent)
E.g. I’ll give you my car now but should you pass the
bar, the donation will not be effective. If you pass the
bar, you must return the car to me.
Assign: Parks vs Province of Tarlac, 49 Phil 142
Is Christmas bonus a demandable and enforceable
obligation?
No, it is not. Unless it is made part of the wage or
salary. Even then, the bonus would be CONTINGENT
(or conditional) on the realization of profits. (Luzon
Stevedoring Corporation vs CIR, 1965)
1182 – When the fulfillment of the condition depends
upon the sole will of the debtor, the conditional
obligation shall be void. If it depends upon chance or
upon the will of a third person, the obligation shall
take effect in conformity with the provisions of this
Code.
Potestative or facultative condition – depends on the
exclusive will of one of the parties
Potestative on the part of the DEBTOR
1. If also suspensive – both the condition and
the obligation are void because the obligation
is really illusory
E.g. I’ll give you P1M next month if I live.
2. If also resolutory – valid
E.g. I’ll give you P1M now but if I decide to get
it back next month, you must return the
same.
Potestative on the part of the CREDITOR – valid
E.g. I’ll give you my phone if you desire to have it.
E.g. A owned a house rented by B. A sold the house to
C, and C agreed to pay the balance of the price as
soon as B leaves the premises. C was able to take care
of seeing to it that B vacated the house. A now says
the contract is void because it is potestative on C’s
part.
Is the contract between A and C valid?
Yes. It was not purely potestative on C’s part. B might
vacate on his own, and C would now have to pay.
Fulfillment really in part depended on the will of a
third person (B). Also, If C did not ask B to leave, A
could very well do so by an action for unlawful
detainer against B. And when B is ousted, C would
have to pay. The condition is mixed; therefore, valid.
(Jacinto vs Chua Leng, 45 OG 2919, CA)
E.g. D purchased 200 shares of stock in Corporation Q,
subject to the condition that she would pay for the
same as soon as she would be able to harvest fish
from her fishpond. Is the condition valid?
No. It is a suspensive condition that is a purely
potestative on the part of the debtor.
Casual – depends on chance or upon the will of a third
person (valid).
1183 – Impossible conditions, those contrary to good
customs or public policy and those prohibited by law
shall annul the obligation which depends upon them.
If the obligation is divisible, that part thereof which
is not affected by the impossible or unlawful
condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon.
Impossible condition
1. Physical impossibility – to make a dead man
alive
2. Logical impossibility – to make a circle that is
at the same time a square
Illegal condition - prohibited by good customs, public
policy; prohibited, directly or indirectly by law (killing)
Effects
1. To do an impossible or illegal thing – BOTH
condition and obligation are void, because
debtor knows that no fulfillment can be done
and therefore is not serious about being liable
E.g. I’ll sell you my land if you can make a dead man
alive again.
2. To not do the impossible thing, just disregard
the condition but the obligation remains.
E.g. I’ll send you my land if you cannot make a circle
that is at the same time square. (Becomes a pure and
valid obligation)
3. To not do the illegal thing, both condition and
obligation are valid
E.g. I’ll sell you my land if you do not kill X. (If you kill
X, you have no right to buy my land.)
>>These examples do not apply in testamentary
disposition or donations, bec. the consideration of the
gift is the liberality of the giver.
1184 – The condition that some event happen at a
determinate time shall extinguish the obligation as
soon as the time expires or if it has become
indubitable that the event will not take place.
This article deals with positive conditions.
E.g. A bought B’s land on the condition that within a
certain period of time, B would obtain a Torrens title.
B did not do so within the stipulated term.
In this case, A is released from his obligation to
purchase. (Addison vs Felix, 38 Phil 404)
E.g. A sold B a parcel of land on the condition that the
price would be paid as soon as B had paid off the
mortgage and other debts of the estate. A waited for
some time, but since B had not yet succeeded in
paying off the debts, A brought an action to cancel the
sale. Will the sale be cancelled?
No, the sale will not be cancelled. There was no time
stipulated here. Under par. 2, Art 1185, NCC, if no
time has been fixed, the condition shall be deemed
fulfilled at such time as may have probably been
contemplated bearing in mind the nature of the
obligation. The court, in this case, considered the
parties’ intentions. (Martin vs Boyero, 55 Phil 760)
1185 – The condition that some event will not
happen at a determinate time shall render the
obligation effective from the moment the time
indicated has elapsed, or if it has become evident
that the event cannot occur.
If no time has been fixed, the condition shall be
deemed fulfilled at such time as may have probably
been contemplated, bearing in mind the nature of
the obligation.
*This article refers to negative obligations.
E.g. I’ll give you P1 M if by Oct 1, 2005 you have not
yet married Ms. X. If by said date, you are not yet
married or prior thereto, Ms. X had died, the
obligation is effective.
What if, before Oct 1, 2005, you became a Roman
Catholic priest, is the obligation effective on the date
you entered the priesthood? No. because some
priests, despite religious vows still contract legally
valid marriage.
1186 – The condition shall be deemed fulfilled when
the obligor voluntarily prevents its fulfillment.
*This article deals with CONSTRUCTIVE or PRESUMED
FULFILLMENT. Reason for the article: One must not
profit by his own fault.
For this article to apply, there must be intention and
actual prevention.
E.g. A promised to sell his car to B if C could pass the
bar. On the day of the examination, A caused C to be
poisoned and be hospitalized. A is still bound to sell
the car.
But, if it turns out that C was really disqualified to take
the bar, as when he had not finished high school, A is
not bound.
What if, A actually knows that C was really
disqualified, will A be liable? Yes. This time it will
become an (logically) impossible condition under
1183.
E.g. Valencia bid for the installation of the plumbing in
a government building. The bid was accepted, and
Valencia was asked to put up the performance bond.
Valencia did not put up the bond and did not begin
the work. When sued, his defense was that since he
did not put up the bond, there was no contract since
the condition was not complied with.
Held: Valencia is liable. Putting up the performance
bond was NOT a condition before he could be
compelled to make the installation, although of
course it was a condition before he could insist on
working and on getting paid. Also, assuming that the
condition was indeed conditional, it was he who
voluntarily prevented its fulfillment; therefore, he can
be held liable.
*Article generally applies to suspensive conditions.
But it may sometimes apply to a resolutory condition.
E.g.
A sold a land to B on the condition that B marries C
within one year, otherwise, B would return the land. If
A kills C, B does not have to return the land because A
is at fault.
1187 – The effects of a conditional obligation to give,
once the condition has been fulfilled, shall retroact to
the day of the constitution of the obligation.
Nevertheless, when the obligation imposes
reciprocal prestations upon the parties, the fruits
and interests during the pendency of the condition
shall be deemed to have been mutually
compensated. If the obligation is unilateral, the
debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances
of the obligation it should be inferred that the
intention of the person constituting the same was
different.
In obligations to do and not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with.
*This article refers to a suspensive condition. When a
suspensive condition is fulfilled, the obligation
becomes effective. But when?
General rule: The obligation becomes effective
retroactively or the day when the obligation was
constituted.
Exception:
1. As to fruits and interests
2. As to prescriptive period. Here, the period
runs from the day the condition was fulfilled,
because it can be enforced only from said
date.
Example:
Jose in 2004 promised to sell to Maria his car provided
Maria passes the bar in 2006. Maria passed the bar in
2006.
Effect: as if Maria was entitled to the car since 2004.
If Maria mortgages the car in 2004, will it be a valid
mortgage? -YES. General rule is mortgagor must be
owner. Since Maria is deemed the owner in 2004, her
mortgage that year of the same property is valid.
Any alienation by Jose should, as a rule, be invalid.
*This retroactive effect can only apply to consensual
contracts (like sale), and not to real contracts such as
deposit or commodatum which are perfected only
upon delivery.
*No retroactive effects as to fruits and interests,
unless there is a contrary intent.
Reciprocal obligations: fruits are kept by one party;
legal interest is kept by the other one.
1188 – The creditor may, before the fulfillment of the
condition, bring the appropriate actions for the
preservation of his right.
The debtor may recover what during the same time
he has paid by mistake in case of suspensive
condition.
First paragraph means to bring action before the court
to protect rights of creditors. Otherwise, the object
may be deliberately destroyed, hidden or alienated.

Second paragraph means protection against unjust
enrichment.
(Option to skip 1189 to 1192)
1189 – When the conditions have been imposed with
the intention of suspending the efficacy of an
obligation to give, the following rules shall be
observed in case of the improvement, loss or
deterioration of the thing during the pendency of the
condition:
1. If the thing is lost without the fault of the
debtor, the obligation shall be extinguished;
2. If the thing is lost through the fault of the
debtor, he shall be obliged to pay damages;
it is understood that the thing is lost when it
perishes, or goes out of commerce, or
disappears in such a way that its existence is
unknown or it cannot be recovered;
3. When the thing deteriorates without the
fault of the debtor, the impairment is to be
borne by the creditor;
4. If it deteriorates without the fault of the
debtor, the creditor may choose between
rescission of the obligation and its
fulfillment, with indemnity for damages in
either case;
5. If the thing is improved by its nature, or by
time, the improvement shall inure to the
benefit of the creditor;
6. If it is improved at the expense of the debtor,
he shall have no right that that granted to
the usufructuary.
This article applies only if:
1. Suspensive condition is fulfilled; and
2. Object is specific (not generic)
What are the three things that may happen to the
object of an obligation pending fulfillment of the
suspensive condition?
1. May be lost
a. Without the fault of the debtor –
OBLIG, EXTINGUISHED
b. With fault of the debtor – DEBTOR
PAYS DAMAGES
c. Partly with and partly without the
fault of the debtor – If complete loss,
USE RULES ON LOSS; if partial loss,
USE RULES ON DETERIORATION
2. May deteriorate (value is reduced or
impaired)
a. Without the fault of the debtor –
CREDITOR BEARS IMPAIRMENT
b. With fault of the debtor – Creditor
chooses between RESCISSION OR
FULFILLMENT, w/ damages lagi
c. Partly with and partly without the
fault of the debtor – in pari delicto
3. May be improved
a. By nature or time – INURES TO THE
CREDITOR
b. Through the expense of the debtor –
DEBTOR’S right as if a usufructuary;
c. Partly through nature or time and
partly by the debtor – Creditor gets
benefit from improvement by nature
or time; debtor entitled to rights of
usufructuary.
1190 – When the conditions have for their purpose
the extinguishment of an obligation to give, the
parties upon the fulfillment of said conditions, shall
return to each other what they have received.
In case of loss, deterioration or improvement of the
thing, the provisions which, with respect to the
debtor are laid down in the preceding article shall be
applied to the party who is bound to return.
As for obligations to do and not to do, the provisions
of the second paragraph of Article 1187 shall be
observed as regards the effect of the extinguishment
of the obligation.
Effects when resolutory condition is fulfilled
1. Obligation is extinguished. (Art 1181)
2. Because the obligation had been extinguished
and considered to have had no effect, the
parties should restore to each other what
they have received.
3. Aside from actual things received, the fruits or
the interests thereon should also be returned
after deducting the expenses made for their
production, gathering and preservation. (Art
443)
4. Rule in 1189 will apply to whoever has the
duty to return in case of loss, deterioration of
improvement of the thing.
5. Courts are given power to determine the
retroactivity of the fulfillment of resolutory
conditions.
Skip 1191 & 1192
1193 – Obligations for whose fulfillment a day
certain has been fixed, shall be demandable only
when that day comes.
Obligations with a resolutory condition take effect at
once, but terminate upon arrival of the day certain. E.g. I will support you until Jan 1, 2021.

A day certain is understood to be that which must Requisites of a valid period:

necessarily come, although it may not be known 1. Must refer to the future
when. 2. Must be certain (sure to come) but can be
extended. If eliminated subsequently by
If the uncertainty consists in whether the day will mutual agreement, the obligation becomes
come or not, the obligation is conditional and it shall pure and is immediately demandable.
be regulated by the rules of the preceding Section. 3. Must be physically and legally possible;
otherwise, the obligation is void. (E.g. I’ll give
Period – certain length of time which determines the you my house one year after your death.)
effectivity of the extinguishment of obligations
Example 1
Period / Term Condition A ordered goods from B. The goods were supposed to
As to fulfillment: event Condition is uncertain if be paid for when they arrived from the US. It was
which must happen it will happen or not, as proved that for goods to be able to leave the US, the
sooner or later at a date a fact. US government had to give a certificate of priority and
known beforehand or a permission; otherwise, the goods will remain in the
time which cannot be US.
determined
Issue: Is the arrival of the goods in Manila from the
With reference to time: May refer even to the US, a term or a condition?
always refers to the past
future Held: Condition. Arrival of goods in uncertain, owing
to the different requirements that had to be complied
As to influence on Causes an obligation to with first. (Smith, Bell & Co vs Sotelo Matti, 44 Phil
obligation: merely fixes arise or to cease 874)
the time or
efficaciousness of an Example 2
obligation The clause “until the defendant shall have obtained a
loan from BDO, or after it has obtained funds from
other sources,” should be considered a condition
Different kinds of period (NOT A TERM), for obtaining funds may or may not
1. Definite – exact date or time is known and happen. (Berg vs Magdalena Estate Inc, 92 Phil 110)
given
2. Indefinite – something that will surely happen Example 3
but the date of happening is unknown A lease on a “month to month basis” is one with a
definite period. (Santos vs CA, L-60210, Mar 27, 1984)
3. Legal – period granted under the provisions of
law A day certain – that which must necessarily come,
4. Conventional or voluntary – period agreed although it may not be known when (Par 3, Art 1193)
upon or stipulated by the parties
5. Juridical – period or term fixed by the courts 1194 – In case of loss, deterioration or improvement
for the performance of an obligation or for its of the thing before the arrival of the day certain, the
termination rules in Article 1189 shall be observed.

6. Ex die – period with a suspensive effect. Here,
the obligation begins only from a day certain.
In other words, upon the arrival of the period.
E.g. I will support you beginning the first day of 2021.
1195 – Anything paid or delivered before the arrival
of the period, the obligor being unaware of the
period or believing that the obligation has become
due and demandable may be recovered, with the
fruits and interests.

7. In diem – period or term with resolutory Payment or delivery made before the arrival of the
effect. Up to a time certain, the obligation period
remains valid, but upon arrival of the said
period, the obligation terminates. E.g.
A was supposed to pay B P1 million on Dec 31, 2005.
But believing that the obligation was due and
demandable already on Dec 31, 2004, A paid B the P1
million on said date. May A recover from B on Jun 30,
2005? How much?
Yes, A may recover from B on Jun 30, 2005 because he
paid on the belief that the obligation has become due
and demandable. Even if A is bound to pay B sooner
or later, still, it is unjust to deprive A in the meantime
of the money as well as its use (interest).
He can recover P1 million plus interest, computed as
follows:
P1,000,000 x 6% (interest per year) = P60,000
P60,000 ÷ 2 (Jan1 - Jun30, 2005) = P30,000
P1,000,000 + P30,000 = P1,030,000
E.g.
Suppose A had paid prematurely knowing fully well of
the existence of the term, how much can A recover?
A can recover nothing. The law does not give him such
right. To be able to recover, A:
1. Must have ben UNAWARE of the period; OR
2. Must Have believed that the obligation has
become due and demandable.
Since A did not have either of these conditions, he
cannot recover. Reason: After all, A is supposed to pay
B sooner or later so why let him recover since,
anyway, it was A’s fault that premature payment was
made.
E.g.
On Mar 1, A sold B a particular car. It was agreed upon
that payment and delivery were to be made on Mar
31. But on Mar15, A delivered the car and B paid for
said car. Pending the arrival of Mar31, should B return
the car plus damages and should A return the price
plus interest?
No obligation to return. While it is true that Mar31
was the date for payment and delivery of the car, the
subsequent actions of the parties concerned show
that booth implicitly agreed to the changing of the
date specified.
Even if there had been no change in the date agreed
upon, still, it is a reciprocal obligation. In reciprocal
obligations, pending the fulfillment of the condition,
(and therefore, also pending termination of the
period), the interests and fruits are deemed to
compensate each other where has been premature
performance on both sides.
PERIOD WITHIN WHICH RECOVERY MAY BE MADE
As regards what has been paid – BEFORE debt
matures
As regards interests – Even AFTER maturity bec.
creditor was in bad faith (but right prescribes after 5
years from premature payment under Art 1149, NCC).
*No recovery if debtor knew that payment was not
yet due and despite that still paid prematurely. This
applies regardless if creditor is in bad faith or not.
*Presumption is the debtor knew of the
prematureness, but may be rebutted (Manresa)
*”W/in 8 years” is different from “within the 8th year.”
1196 – Whenever in an obligation a period is
designated, it is presumed to have been established
for the benefit of both the creditor and the debtor,
unless from the tenor of the same or other
circumstances it should appear that the period has
been established in favor of one or the other.
GR: Term is for the benefit of debtor and creditor
This means that debtor need not pay prematurely and
creditor cannot demand prematurely.
*This only applies where the parties themselves have
fixed a period, and not to a case where the parties
have authorized the Court to fix a reasonable term.
EXCEPTIONS
1. Term is for the benefit of the debtor alone.
He is required to pay only at the end, but he
may pay even before.
E.g. D will pay Bank E for a car loan within 5 years. D
can pay Bank E even after a week from contracting the
loan.
Practical purpose: To save from further interests
2. Term is for the benefit of the creditor alone.
Creditor can demand at anytime even before
the term expires, and he cannot be compelled
to accept payment from debtor prior to the
stipulated period.
E.g. D promised to pay Bank E on Dec 1, 2005, with
the creditor given the right to demand performance
even before said date.
E.g.D promised to pay his loan with Bank E on Dec 1,
2005, and D cannot prepay the said loan prior to said
date.
Practical purpose: to earn more from interests in the
entire duration of the obligation.
*Acceptance of partial payment even before
expiration of the period means a WAIVER on the part
of the creditor of his right to refuse payment before
the end of said period. (Lopez vs Ochoa, L-7955, May
30, 1958)
1197 – If the obligation does not fix a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fix the duration thereof.
The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
In every case, the courts shall determine such period
as may under the circumstances have been probably
contemplated by the parties. Once fixed by the
courts, the period cannot be changed by them.
WHEN COURT MAY FIX A PERIOD:
1. When duration depends upon the will of the
debtor
a. When my means permit me to do so
b. I’ll pay you little by little
c. As soon as possible
d. As soon as I have money
e. In partial payments
f. When debtor is “in a position to
discharge his obligation”
2. When although the obligation does not fix a
period, it can be inferred that a period was
intended
a. Contract to construct a house where
the period was not stated
b. Donation where the land was given
provided certain construction was to
be made on it
c. An obligation with indefinite period,
such as when the time for the
payment of a subscription of shares of
stocks has not been fixed.
d. As long as the tenant shall see fit.
e. As long as tenant pays the stipulated
rent
f. In a sale on credit, when parties
forgot to state in the INVOICE the
period of payment
*When the court fixes the term, does it amend or
modify the obligation? NO. Art 1197 is part and parcel
of all obligations contemplated. Hence, whenever a
period is fixed, the court merely enforces or carries out
an implied stipulation in the contract.
WHEN THE COURT MAY NOT FIX THE TERM
1. When no term was specified because no term
was intended. In such case, obligation is really
a pure one, and demandable at once, unless
absurd consequences would arise
2. When payable on demand
3. When specific periods are provided for in the
law
4. When it appears that a term is really a
condition (e.g. debt is payable only after the
debtor’s estate’s other debts have been paid,
for this does not depend upon the exclusive
will of the debtor)
5. Period within which to ask the court to have
the period fixed has itself already prescribed
WITHIN WHAT PERIOD MUST THE ACTION TO FIX
PERIOD BE BROUGHT?
Within the proper prescriptive period for specific
performance, if a period had been originally fixed, but
to be counted from the perfection of the contract.
Right exists by operation of law from the moment
such agreement was perfected. EXTRAJUDICIAL
DEMAND IS NOT ESSENTIAL for the creation of the
cause of action to have the period fixed. (Calero vs
Carrion, et al. L-13246, Mar 30, 1960)
>> This is not the same as the DEMAND
required to declare a person in default.
>> Written contract prescribes after 10 years
HOW COURT FIXES PERIOD
By considering time probably contemplated by the
parties.
1198 – The debtor shall lose every right to make use
of the period:
1. When after the obligation has been
contracted, he becomes insolvent, unless he
gives a guaranty or security for the debt;
2. When he does not furnish the creditor the
guaranties or securities which he has
promised;
3. When by his own acts he has impaired said
guaranties or securities after their
establishment, and when through a
fortuitous event they disappear, unless he
immediately gives new ones equally
satisfactory;
 4. When the debtor violates any undertaking,
in consideration of which the creditor agreed
to the period;
5. When the debtor attempts to abscond.
When the debtor loses the benefit of the period, the
term is extinguished and the obligations becomes
demandable at once.
Daguhoy Enterprises vs Ponce, 96 Phil 15
Example of paragraph 2: Debtor instead of making a
mortgage in favor of the creditor, makes it in favor of
another person. Because debtor fails to furnish the
promised guaranties, he therefore loses the benefit of
the term.
In par 3, note that what has been lost is the security,
not the object of the principal obligation. Thus, even if
due to a fortuitous event, loss of the security will
generally make an obligation, immediately due and
demandable.
Example of par 4: Employee commits substantial
breach of employment contract, employer may
terminate employment even if there was fixed
duration for the job.
In par 5, there is no need for ACTUAL absconding.
Intent and attempt to do so is sufficient.
HOW TERMS ARE COMPUTED (Art 13, NCC)
Year – 365 days each
Month – 30 days
Day – 24 hours
Night – From sunset to sunrise
If months are designated by their name, they shall be
computed by the number of days which they
respectively have.
In computing a period, the first day shall be excluded
and the last day included.
ALTERNATIVE OBLIGATIONS
1199 – A person alternatively bound by different
prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of
one and part of the other undertaking.
ALTERNATIVE OBLIGATION – one where one of the
two or more prestations which may be given, only one
is due.
E.g.
A will give B this car or this ring or this fountain pen. A
does not have to give B all three things enumerated.
Just one would suffice.
In the example given, may A compel B to accept half
the car and half the ring?
NO. B cannot be forced to accept. The creditor cannot
be compelled to receive part one and part of the
other undertaking.
OTHER EXAMPLES:
1. A borrowed money from B. At the maturity of
debt, they agreed that A will give B either the
sum lent or a particular house and lot.
2. A insured his house with B, an insurance
company. Per the contract, if the house is
damaged or destroyed, B may either pay for
the damage or have the house rebuilt in a
sufficient manner.
Compare Art. 1199 with 1206, NCC:
1206 – When only one prestation has been agreed
upon but the obligor may render another in
substitution, the obligation is called facultative.
The loss or deterioration of the thing intended as a
substitute, through the negligence of the obligor,
does not render him liable. But once the substitute
has been made, the obligor is liable for the loss of
the substitute on account of his delay, negligence or
fraud.
FACULTATIVE OBLIGATION – Only one object is due
but the debtor may substitute it with another object.
1200 – The right of choice belongs to the debtor,
unless it has expressly been granted to the creditor.
The debtor shall have no right to choose those
prestations which are impossible, unlawful or which
could not have been the object of the obligation.
WHO HAS THE RIGHT OF CHOICE
G.R. the debtor
Exception: when right is expressly granted to creditor
LIMITATION ON DEBTOR’S CHOICE
Debtor cannot choose prestations which are:
1. Impossible
2. Unlawful
3. Could not have been the object of the
obligation
E.g.
A is bound to give B (1) a pack of shabu, (2) gold poop
from the golden bibe, (3) a particular cigarette case, or
a particular fountain pen.
A cannot choose (1) because it is unlawful; nor (2)
because it is impossible. A can only choose between
(3) and (4).
REQUISITES for making the choice:
1. Made properly so that the creditor or his
agent will actually know
2. Made with full knowledge that a selection is
indeed being made (Error in appreciating the
meaning of “alternative” obligations will give
rise to vitiated consent, and the choice can
later on be annulled.)
3. Made voluntarily and freely (without force,
intimidation, coercion or undue influence)
4. Made in due time (i.e. before or upon
maturity; otherwise, the creditor can sue him
in court)
5. Made to all the proper persons (hence, if
there are joint creditors, all of them must be
notified)
6. Made without conditions unless agreed to by
the creditor
7. May be waived, expressly or impliedly
1201 – The choice shall produce no effect except
from the time it has been communicated.
*Choice can be communicated in written or oral form
*Once notice has been made that a choice has been
done, the obligation becomes a simple one, to do or
to deliver the object selected.
*An election, once made, is binding upon the person
who makes it, and he will not, therefore, be permitted
to renounce his choice and take an alternative which
was first open to him.
1202 – The debtor shall lose the right of choice when
among the prestations whereby he is alternatively
bound, only one thing is practicable.
X is obliged to give Y either object A, object B, or
object C. If objects A and B are lost by fortuitous event
before choice can be made, X can deliver only object
C, because the obligation has become a simple one. If
later, object C is also destroyed by a fortuitous event,
the obligation is extinguished and X would not be
liable in any way.
1203 – If through the creditor’s act, the debtor
cannot make a choice according to the terms of the
obligation, the latter may rescind the contract with
damages.
D promised to teach C OBLICON for the year 2020, or
to buy C an iPad tablet. If in 2020, C goes to China, D
obviously cannot teach him, and since D is deprived of
the right to choose because of C’s own act, D may
either:
1. Buy the iPad table, or
2. Rescind the contract with right to recover
whatever damages he has suffered.
Observe that the contract is not automatically
rescinded. The law says that the debtor, “may
rescind” implying that he may allow it to remain in
force insofar as the possible choice or choices are
involved.
1204 – The creditor shall have a right to indemnify
for damages when, through the fault of the debtor,
all the things which are alternatively the object of
the obligation have been lost, or the compliance of
the obligation has become impossible.
The indemnity shall be fixed taking as a basis the
value of the last thing which disappeared, or that of
the services which last became impossible.
Damages other than the value of the last thing or
service may also be awarded.
This article talks about the alternative rights of
creditors when loss or impossibility occurs before the
debtor’s choice.
It applies when:
1. Right to choose belonged to the debtor
2. Loss or impossibility happened before
selection was made.
1205 – When the choice has been expressly given to
the creditor, the obligation shall cease to be
alternative from the day when the selection has been
communicated to the debtor.
Until then, the responsibility of the debtor shall be
governed by the following rules:
1) If one of the things is lost through a
fortuitous even, he shall perform the
obligation by delivering that which the
 creditor should choose from among the
remainder, or that which remains if only one
subsists;
2) If the loss of one of the things occurs through
the fault of the debtor, the creditor may
claim any of those subsisting, or the price of
that which, through the fault of the former
has disappeared, with a right to damages;
3) If all the things are lost through the fault of
the debtor, the choice by the creditor shall
fall upon the price of any one of them, also
with indemnity for damages.
The same rules shall be applied to obligations to do
or not to do in case one, some or all of the
prestations should become impossible.
1206 – When only one prestation has been agreed
upon but the obligor may render another in
substitution, the obligation is called facultative.
substitute, the principal
must still be given
Section 4
JOINT AND SOLIDARY OBLIGATION
1207 – The concurrence of two or more creditors or
of two or more debtors in one and the same
obligation does not imply that each one of the
former has a right to demand, or that each one of
the latter is bound to render, entire compliance with
the prestation. There is a solidary liability only when
the obligation expressly so states, or when the law
or the nature of the obligation requires solidarity.
JOINT OBLIGATION – each obligor answers only for a
part of the whole liability and to each oblige belongs
only a part of the correlative rights.
*To each his own

The loss or deterioration of the thing intended as a
substitute, through the negligence of the obligor,
does not render him liable. But once the substitute
has been made, the obligor is liable for the loss of
the substitute on account of his delay, negligence or
fraud.
The Article speaks of a facultative obligation. It is one
where only one prestation has been agreed upon but
the obligor may render another in substitution.
E.g.
D promised to give C his diamond-studded ring but it
was stipulated that D could give his BMW car as a
substitute.
SOLIDARY (or joint and several) OBLIGATION –
relationship between the active and the passive
subjects is so close that each of the former or of the
latter may demand the fulfillment of or must comply
with the whole obligation.
*One for all, all for one
Example of joint obligation:
1. A & B are joint debtors of C to the amount of
P1 M. C can demand only P500k from A and
only P500k from B.
2. A & B are joint debtors of C, D, E & F, who are
joint creditors to the amount of P1M. C may
demand only P125k from A and P125k from B.
D, E & F have the same rights as C.

ALTERNATIVE FACULTATIVE Example of solidary obligation:

Various things are due,
but giving of one is
sufficient
If one of the prestations
is illegal, the others may
be valid and the
obligation remains
If it is impossible to give
all except one, that last
one must still be given
Only one thing is
principally due, and it is
that one which generally is
given, but the substitute
may be given to render
payment or fulfillment
easy
If the principal obligation is
void, and there is no
necessity of giving the
substitute (Nullity of the
principal carries with it the
nullity of the accessory or
substitute)
If it is impossible to give
principal, substitute does
not have to be given; if it is
impossible to give the
1. A & B are solidary debtors of C to the amount
of P1M. C can demand the whole P1M from A.
A in turn, after paying C, can ask for
reimbursement from B to the amount of
P500k.
2. A & B are solidary debtors of C, D, E & F,
solidary creditors, to the amount of P1M. Any
creditor like C, can demand from any debtor
like A, the whole amount of P1M. In turn, C
has to give P250k each to D, E & F. B has to
reimburse A for P500k which is really’s share
of the obligation.
General Rule:
When there are two or more debtors or two or more
creditors, the obligation is generally JOINT, except:
 1. When there is a stipulation in the contract
that the obligation is solidary
2. When the nature of the obligation requires
liability to be solidary; and
3. When the law declares the obligation to be
solidary
Examples when law imposes solidary liability:
1. Tort or quasi delict
2. Obligations from quasi-contracts
3. Liability of principals, accomplices and
accessories of a felony
4. Bailees in commodatum.
May an obligation be joint on the side of creditors and
solidary on the side of the debtors, or vice versa?
YES. In such cases, the rules applicable to each subject
of the obligation should be applied, the character of
the creditors or the debtors determining their
respective rights and liabilities.
E.g.
A and B are joint debtors of C, D, E and F, solidary
creditors to the amount of P1 M. How much can C
collect from A?
ANS: C is a solidary creditor, so presumably, he can
collect the whole debt. But since A is only a joint
debtor, C is entitled to collect only P500k from A.
E.g.
A and B are solidary debtors of C, D, E and F, joint
creditors to the amount of P1 M. How much can C
recover from A?
ANS: Since C is only a joint creditor, he can only
recover his share which is P250K from A, a solidary
debtor.
Had C been a solidary creditor, he could have
recovered P1M from A; had A been a joint debtor and
C, also a joint creditor, C would have recovered only
P125k from A.
Actual case samples:
1. It is NOT ACCURATE to say that the heirs are
solidarily liable for the debt of their father.
Before the heirs share in the inheritance, the
debt must be paid first. (Carlo, Jr. vs Cabanos,
L-19704, Oct 19, 1966)
2. Individually and collectively for the total
amount = solidary (Oriental Commercial Co.,
Inc. vs Felix Lafuente, [CA] 38 OG 947)
3. Tortfeasors (those liable for quasi-delict) are
solidarily liable. (Worcester vs Ocampo, et al.,
22 Phil 42)
4. Liability of two motor vehicle drivers
convicted for reckless imprudence is solidary.
Consequently, the employer of each of them
is also solidarily liable WITH RESPECT TO
THEIR SUBSIDIARY LIABILITY. (Gonzales vs
Halili, et al., L-11521, Oct 31, 1958)
Synonyms for JOINT OBLIGATION:
1. Mancomunada
2. Mancomunada simple
3. Proportionate
4. Pro rata
5. “We promise to pay,” when there are two or
more signatures
Synonyms for SOLIDARY OBLIGATION:
1. Joint and several
2. In solidum
3. Mancomunada solidaria
4. Juntos o separadamente
5. Individually and collectively
6. Each will pay the whole value
7. “I promise to pay,” when there are two more
signatures
1208 – If from the law, or the nature of or the
wording of the obligations to which the preceding
article refers, the contrary does not appear, the
credit or debt shall be presumed to be divided into as
many equal shares as there are creditors or debtors,
the credits or debts being considered distinct from
one another, subject to the Rules of Court governing
the multiplicity of suits.
When there are two or more debtors, or two or more
creditors, the obligation is joint and as a consequence:
1. Debt shall be divided into as many shares as
there are creditors or debtors.
2. Credits or debts will be distinct from one
another, BUT regarding the bringing of action
in court, the Rules of Court governing the
multiplicity of suits will be followed. This
means it would be better to sue all necessary
parties at the same time, notwithstanding the
distinct character of the credit or debt.
CONSEQUENCES OF JOINT LIABILITY:
1. Vitiated consent on the part of one debtor
does not affect the others.
E.g.
A and B are joint debtors of C for P1 M. A’s consent
was obtained by C through fraud. B would still be
liable for P500k, while A will not be liable since the
two debts are considered distinct from each other.
2. Insolvency of one debtor does not make
others responsible for his shares.
E.g. A, B and C are joint debtors of D for P3M. If A is
insolvent, how much should B pay D?
ANS: Only P1M, for his own proportionate share.
3. Demand by the creditor on one joint debtor
puts him in default but not the other debtors
since debts are distinct.
4. When the creditor interrupts the running of
the prescriptive period by demanding
judicially from one, the others are not
affected. Therefore, it is possible that the
share of one joint debtor has not prescribed,
while those of the others have already
prescribed. (Agoncillo & Mariano vs Javier, 38
Phil 424)
LIABILITIES OF AGENTS:
GR: Joint
Exception: When otherwise agreed upon
LIABILITIES OF CO-PRINCIPALS IN AGENCY:
Solidary
LIABILITIES OF HUSBAND AND WIFE:
After conjugal funds have been exhausted, the
husband and wife are liable jointly to creditors of the
conjugal partnership. (Art. 147, NCC)
LIABILITIES OF VIOLATORS OF ARTS 19, 20, 21, 22
(HUMAN RELATIONS) OF THE NCC
Although the law does not expressly say so, it is
believed that infractors thereof should be held liable
solidarily, considering the fact that said violations are
either penal in nature or contrary to morals. These are
perhaps cases where there is solidarity because of the
nature of the obligation. (Art. 1207, NCC)
LIABILITIES OF EMPLOYES AND EMPLOYEE FOR THE
EMPLOYEE’S TORTIOUS ACT
Liability of employer is primary and solidary with the
employees (Arts 2180 and 2194, NCC). However, if the
injured party does not appeal from an erroneous
judgment holding the liability to be merely subsidiary,
instead of solidary, the obligation ceases to be
solidary by virtue of the principle of res judicata
(Bachrach Motor Co., vs Gamboa, L-10296, May 21,
1957)
E.g.
The contract states, “Jose or Maria will pay you P1M,
should this be considered alternative, joint or
solidary?
ANS: It depends on the intention of the parties. If
what is intended is to have the obligation satisfied in
full, the payer being immaterial, the courts may be
inclined to consider the same as solidary, with the
creditor being given the right to select who would
pay, and in case of partial performance only, he can
still ask the other for the balance.
1209 – If the division is impossible, the right of the
creditors may be prejudiced only by their collective
acts, and the debt can be enforced only by
proceeding against all the debtors. If one of the
latter should be insolvent, the others shall not be
liable for his share.
This article speaks of an indivisible joint obligation.
Indivisibility refers to the object. Joint nature refers to
the tie between the parties, who are merely
proportionately liable, unless solidarity has been
stipulated by the parties or the law, in which case, it is
called a solidary indivisible obligation.
E.g.
A and B are jointly liable to give C this particular car.
CHARACTERISTICS OF INDIVISIBLE JOINT OBLIGATION:
1. Obligation is joint but since the object is
indivisible, the creditor must proceed against
ALL the joint debtors, for compliance is
possible only if all the joint debtors would act
together.
2. Demand must be made on ALL joint debtors.
3. If any one of the debtors does not comply, the
obligation is converted into a monetary
obligation where those who are ready to
comply shall not be liable for the share of
others incapable of compliance. (Art 1224,
NCC)
4. If any of the debtors be insolvent, the others
shall not be liable for his share.
Note: The obligation to pay monetary damages is no
longer indivisible, and therefore, the creditor may go
against each debtor individually, subject to the
provisions of the Rules of Court.
 5. If there be joint creditors, delivery must be
made to all, and not merely to one, unless
that one be specifically authorized by the
others.
6. Each joint creditor is allowed to renounce his
proportionate credit.
E.g.
A, B and C are jointly liable to give a particular car
worth P1.2M in favor of D, E, F and G. A is insolvent
and the debtors, therefore, cannot purchase the car
to give to the creditors. D and E have renounced their
rights. The debtors are not in default. How much can
each of the creditors get from each of the debtors?
ANS: Since this a joint and indivisible obligation and
since the car cannot be given, it is converted into an
obligation to give indemnity for damages. Since this a
joint obligation, each debtor is proportionately liable
and each creditor is only entitled to his proportionate
credit.
P1.2M ÷ 3 = P400k (total debt of each
debtor)
P400k ÷ 4 = P100k (credit belonging to
each joint creditor, not from
each joint debtor)
A is insolvent, and his share will not be included in the
liability of B and C.
Therefore,
- D & E having renounced their rights, they get
nothing.
- F has not renounced his right, so he can get P100k
from B and P100k from C. Over A, F has the rights
of creditor over an insolvent debtor.
- G has exactly the same rights as F.
*A demand by one joint creditor is not a demand by
the others.
1210 – The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does solidarity
on itself imply indivisibility.
INDIVISIBILITY vs SOLIDARITY
- Indivisibility refers to the subject matter.
- Solidarity refers to the tie between the parties.
E.g.
1. Joint divisible obligation – A and B are jointly
liable to X for P1M.
2. Joint indivisible obligation – A and B are jointly
liable to give X this car.
3. Solidary divisible obligation – A and B are
solidarily bound to give X P1M.
4. Solidary indivisible obligation – A and B are
solidarily bound to give X this car.
1211 – Solidarity may exist although the creditors
and the debtors may not be bound in the same
manner and by the same periods and conditions.
Different kinds of solidarity:
1. Active solidarity – on the part of the creditors
or obliges
2. Passive solidarity – on the part of the debtors
or obligors
3. Mixed solidarity – on the part of the obligors
and obliges, or on the part of the debtors and
the creditors
4. Conventional solidarity – agreed upon by the
parties
5. Legal solidarity – imposed by law
EXAMPLE OF A CASE WHEN SOLIDARITY MAY EXIST
EVEN WHEN CREDITORS AND THE DEBTORS ARE NOT
BOUND IN THE SAME MANNER
A & B solidarily bound themselves to pay a total of
P1M to C, D and E subject to the following terms and
conditions:
1. C’s share will be due at the end of the year;
2. D will get his share only if he passes the CPA
board exam; and
3. E will get his share only after E has painted the
house of X.
Here, the obligation is still solidary.
In the example given, when will the solidary obligation
be due and demandable?
ANS: While the obligation is still solidary, C’s share will
only be due and demandable at the end of the year,
and E and D’s shares will be due and demandable only
upon the fulfillment of the condition.
Supposing the obligation is to be subject to different
terms and conditions, the following is the solution:
the creditor may recover that part which is pure and
unconditional, and should leave in suspense or
pending the right to demand the payment of the
remainder until the expiration of the term or the
fulfillment of the conditions.
Solidarity is still preserved by recognizing in the
creditor the power upon the fulfillment of the
condition or the expiration of this term, of claiming
from any or all the debtors, that part of the obligation
effected by these conditions. (Check the case of
Inchausti & Co. vs Yulo, 34 Phil 978)
E.g.
In 2004, A, B and C bound themselves in solidum to
give X P300K subject to the following stipulations:
1. A to pay in 2005;
2. B if he passes the CPA board; and
3. C in 2007.
Q: In 2005, how much can X demand from A?
A: P100K. Since this is solidary, X has a right to P300k
(the whole) MINUS B’s share of P100k and C’s share of
P100K, or just P100K. In 2007, X can collect from A,
the P100K corresponding to C. The moment B passes
the CPA board, X can collect from A, B’s share of
P100k
Q: Suppose X instead made a demand on C in 2005,
how much can he collect from C?
A: Only P100k, the share corresponding to A, because
C’s own share has not yet matured and B has not yet
passed the bar.
Note that in both problems, the rules is that the
whole solidary obligation can be recovered from ANY
of the solidary debtors MINUS the share of those with
unmatured conditions or terms.
1212 – Each one of the solidary creditors may do
whatever may be useful to the others, but not
anything which may be prejudicial to the latter.
Solidary creditors may do useful, not prejudicial acts.
Example of beneficial act: To interrupt the running of
the prescription, the act of one solidary creditor in
making a judicial demand upon any of the solidary
debtors is sufficient. The law provides that: The
prescription of actions is interrupted when they are
filed before the Courts. (Art 1155, 1 st clause, NCC)
Example of prejudicial act: should not be performed,
otherwise, there will be liability for damages.
However, in the case of remission or condonation,
which is really prejudicial, the solidary creditor is
allowed to so remit, and the obligation is
extinguished, without prejudice to his liability to the
other creditors. (Art 1215, NCC)
1213 – A solidary creditor cannot assign his rights
without the consent of the others.
GR: Solidary creditor cannot assign his rights
EXCEPTION: If all others consent.
Reason: Solidary obligation implies mutual agency and
mutual confidence.
1214 – Debtor may pay any one of the solidary
creditors; but if any demand, judicial or extrajudicial
has been made by one of them, payment should be
made to him.
To whom must debtor pay?
1. To any solidary creditor
2. Exception: Payment must be made to solidary
creditor who made a demand, judicial or
extrajudicial
Examples:
1. A and B are solidary debtors of C, D and E,
solidary creditors. May A pay C the whole
obligation?
ANS: YES, provided no judicial or extrajudicial demand
has been made by either D or E.
2. A and B are solidary debtors of C, De and E,
solidary creditors. E makes judicial demand.
There is no extrajudicial demand upon A. To
whom should A pay?
ANS: Only to E, who had made the judicial demand.
Payment to any other creditor will not extinguish the
obligation except insofar as the payee’s share is
concerned.
3. A and B are solidary debtors of C, D and E,
solidary creditors. C makes a judicial demand
on A. Can D and E sue A?
ANS: In the meantime, NO because C is supposed to
be representing already D and E. If judgment is
rendered against A, and A does not have enough
money, then D, E or C (individually or collectively) may
still sue B for the remainder. But it is essential that the
first action be first terminated.
 4. A and B are solidary debtors of C, D and E. C
makes extrajudicial demand upon A, who
does not pay. Can D and E sue A?
ANS: Although strictle speaking, the answer may be in
the NEGATIVE, since under the law payment must be
made to C, who had made the extrajudicial demand,
still, the law should not be construed to effect an
absurdity in that D and E would be compelled to just
stand by idly, since C does not institute any judicial
action. Since C’s act (or inaction) is prejudicial to D
and E, the two (D and E) should be allowed to make a
judicial demand.
5. A and B, solidary debtors, are indebted to C, D
and E, solidary creditors. C extrajudicially
demands from A, but B (upon whom no
demand has been made) pays the whole debt
to E. Is B allowed to do that? Is the solidary
obligation extinguished?
ANS: YES, extinguished already. No demand had been
made by C upon B. It is only A that is bound, not B.
1215 – Novation, compensation, confusion or
remission of debt, made by any of the solidary
creditors or with any of the solidary debtors, shall
extinguish the obligation without prejudice to the
provision of Article 1219.
The creditor who may have recovered any of these
acts, as well as he who collects the debt, shall be
liable to the others for the share in the obligation
corresponding to them.
WHAT IS NOVATION?
Novation is the modification of an obligation by
changing its object or principal conditions, or by
substituting the persons of the debtor, or by
subrogating the person of the debtor, or by
subrogating a third person in the rights of a creditor
(Art 1291, NCC)
E.g.
A and B are solidarily liable to X and Y, solidary
creditors for the payment of P800k. A and X agreed
that instead of paying P800k, A will just paint X’s
house. Here, the solidary obligation of paying P800k is
EXTINGUISHED but a new one, that of painting X’s
house, has arisen.
If B did not consent to the novation, B will not be
bound to X and Y in any way, and will not be obliged
to give A anything except insofar as B has been
benefitted.
On the other hand, only X will be allowed to prejudice
his co-creditor Y, so X must reimburse Y for P400k,
which is really Y’s share of the credit.
>>There is also novation when there is a change in the
term of compliance (due and demandability) of an
obligation of one of many solidary debtors.
WHAT IS COMPENSATION?
Compensation is that which takes place when two
persons, in their own right, are creditors and debtors
of each other. (Art. 1278, NCC).
Compensation may be total or partial, depending
upon the amount involved. Total compensation
automatically extinguishes the obligation whether
known or unknown to the parties. (Art 1290, NCC)
E.g.
A and B are solidary debtors of X and Y, solidary
creditors to the amount of P400k. But X owes A P400k
on account of a different obligation.
Here, we have a case of automatic extinguishment of
the obligation by virtue of total compensation. But B
should not benefit completely since it was A’s credit
that was used to compensation. So B owes A P200k
for his share of the debt. On the other hand, Y should
not be prejudiced, so Y can recover P200k (his share in
the credit) from X. (Art. 11215, par2, NCC)
WHAT IS CONFUSION OR MERGER?
Confusion or merger is that which takes place when
the character of creditor and debtor are merged in
the same person (Art. 1275, NCC), as when my check
in the course of negotiation, is eventually endorsed to
me.
E.g.
A and B made a negotiable promissory note in favor of
C and D, whereby A and B bound themselves solidarily
to C and D, solidary creditors. C and D endorsed the
note in favor of E; E in favor of F; and F in favor of A.
Notice that A, who is the debtor, now becomes a
creditor.
There is merger or confusion of rights here. The
solidary obligation is thereby extinguished but B is
indebted to A for B’s share of the debt.
WHAT IS REMISSION OR WAIVER?
Remission or waiver is that act of liberality whereby a
creditor condones the obligation of the debtor. It is
that where the creditor tells the debtor to “forget
about the whole thing.” (Art. 1270, NCC) Remission
may be total or partial.
E.g.
A and B are solidary debtors of X and Y, solidary
creditors to the amount of P4M. X tells A that he was
waiving the whole obligation. Here, the total
remission completely extinguishes the whole
obligation, without prejudice to Y collection from X his
(Y’s) share of the credit of P2M. Otherwise, X’s
remission would prejudice Y.

On the other hand, B does not have to reimburse A

for anything. After all, remission was a gratuitous act,
and A did not have to give anything to the creditors.

EXAMPLE OF PARTIAL REMISSION

A, B and C are solidary debtors of X in the amount of
P3M. X then made a demand from A but collected
only P2M because he was remitting A’s share (of
P1M). How much can A recover from B and C?

ANS: Only P1M from each because the solidary debt

of P3M had been reduced by partial remission to only
P2M.

It follows that A can be reimbursed the P2M (plus

interest, if any is due), and therefore it is as if A did
not have to pay from his own pocket. This is fair
because after all, A’s share had been remitted.

This example is also a correct illustration of the rule

that a partial remission benefits ALL in that the
solidary debt is diminished so that if A had not been
able to pay, or had the creditor chosen to collect from
either B or C, he can demand not P3M but only P2M.

Observe that although from the said standpoint, all

had been benefitted, the individual shares of B and C
have NOT really been diminished.